Just as governments played a central role in the development of steel or aluminium industries, Australia needs a critical minerals’ industry policy to become a market leader in downstream processing.
If Australia wants to develop a critical minerals industry that moves it from being the largest exporter of raw minerals to a globally significant downstream processor with the high-paying jobs that brings, hard choices need to be made.
This is more than what makes it on to the list of critical minerals, something the federal government is again looking at. It is about acknowledging strategic policy, whether in the resources sector or defence, doesn’t come free.Second, internationally there are alternative sources of supply for many critical minerals Australia wants to target.
According to the United States Geological Survey, in the six years between 2016 and 2022, known lithium resources have more than doubled from 40 million tonnes to about 98 million tonnes. Indonesia’s decision to restrict nickel exports has prompted companies such as Ford, Hyundai and Volkswagen to establish battery factories there
Australian policymakers face a choice. Do they encourage new mine developments that will probably get overwhelmed by international competition, or support specific projects capable of operating on the global stage?Even a cursory look at how Australia developed key mineral processing industries such as steel or aluminium shows the central role governments played, especially around the provision of internationally competitive energy supplies and project financing.
This type of policy requires a clear-headed analytical understanding of the interplay between regulatory and market challenges, and emerging geopolitical trends. It cannot be driven by those with the largest marketing budgets or political sway.
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